Irish users start to connect with WiFi hotspots

High prices remain an issue in a competitive sector, but wireless-enabled devices are becoming more common, writes Karlin Lillington.

It can't yet be termed a WiFi revolution in this country, but in the past six months, the sight of people hunched over laptops, writing e-mails or browsing the internet is becoming increasingly common in cafes, bars, hotels, train stations and airports.

While still not a mainstream activity - primary users remain business people and international travellers - something is clearly happening in this highly competitive sector, which in the past year has seen key competitors Eircom and BT Ireland add in hundreds of hotspots (wireless access points), located everywhere from airports to coffee shops to phone boxes. Insomnia cafes, McDonald's and even the Chester Beatty Library - which has a free WiFi connection - make getting online increasingly easy for people on the move.

"We've seen a 280 per cent growth this quarter all island in the usage of hotspots," says Paul Convery, head of BT Openzone, BT Ireland, which has about 250 Irish hotspots.

Eircom has quadrupled its hotspots in the past year, to 312 including many specially-marked phone boxes, and hopes to treble the number again in the next year, while BT says it plans to reach 600 hotspots across the island by 2007.

Neither company will give figures for broadband use, but Andrew Fordham, Eircom's head of business marketing, describes it as generally modest but growing, while Convery says WiFi "is definitely not a loss leader".

He says the US is 18 months ahead of the UK in WiFi usage, and the UK is 12 to 18 months ahead of Ireland, leaving us well behind both North American and European trends, but growing.

What is driving such growth? Partly it's a chicken and egg situation - as more hotspots go in, more people become aware of them and start to use them. Also, prices of both access and hardware are coming down, making WiFI more accessible to more people and changing it from being a luxury business activity to something you do while in a coffee shop when you have half an hour to surf.

And more laptops and devices are wireless-enabled as a standard feature - customers buying laptops in the past year have generally had WiFi included as standard or a low-cost add-on. Companies like chip maker Intel have played a central role as well, say analysts and operators. Intel has partnered and co-branded with operators (here it is BT) to promote hotspots as part of its own drive to highlight its Centrino wireless chipsets.

This is part of Intel's strategy since 2003 to focus publicity and advertising on total platforms and technology "ecosystems"rather than just the components it manufactures, says Intel spokeswoman Barbara Grimes, speaking from Oregon.

A key part of the partnerships with operators involves Intel inspecting hotspots and then helping operators tweak them to give peak performance.

"About half we look at have problems," she says. Simple adjustments give better reception, security and overall user experience, she says. Not just for Centrino users but for anyone going online.

It's not just about Centrino though, as Intel sees wireless laptops as a central part of the home entertainment environment - another area it is marketing products into - and wants to encourage use of wireless broadband both in the home and at hotspots.

That is what interests the Irish operators as well. Both companies see mobile WiFi as part of a broader broadband strategy - one reason why Eircom's standard broadband modems have inbuilt WiFi capabilities, says Fordham.

If people are encouraged to use WiFi at home - and they will probably do so via a wireless-enabled laptop - then they are more likely to take that laptop outdoors and try out hotspots, goes the thinking, and hotspots provide another, lucrative line of revenue in a world where voice costs keep dropping.

That's why Eircom has introduced a low-cost offering where its broadband subscribers can get access to all its Irish hotspots for only €10 monthly - an offer that formerly cost €66 monthly and was aimed only at businesses.

BT Ireland says it will have a similar offering later in the summer.

Likewise, the companies have been pulling down access prices overall. Logging on to a hotspot has until now been a fairly pricey activity, with one-hour passes costing in the region of €10. In an attempt to drive up usage, Eircom is dropping the price of a one-hour voucher to €5, and a 30-minute voucher will weigh in at €3.

Those prices are a direct response to a changing market. On the one hand, there are requests from the cafes and restaurants that now provide WiFi via packages from the main operators, but whose customers don't stick around for long. An hour is too much to pay for, but 30 minutes is about right if you are sipping a latte and want to go online.

On the other hand is the non-business user who is paying for access out of her own pocket and will not find €10 an hour a compelling pricepoint even if she has a WiFi laptop. With all incoming UCD students required to have a laptop, operators are beginning to realise the lower-end market is building.

In some aspects, usage is "very related to price", Convery acknowledges. With a usage split that sees 80 per cent of the BT Ireland WiFi market divided equally between the international business traveller and the "road warrior" domestic business user, and only 20 per cent to the average computer user, price seems set to remain a sticking point.

As price lowers, user numbers will build, an eventuality that the operators are betting on. But for now, there seems to be more access points than people ready to use them.

"It's all about critical mass. We're only very young, about 18 to 20 months into this, and you could view it as a start-up market," says Convery.

Fordham concurs: "It's still a need-driven thing, not a want-driven thing."

But probably not for much longer if Ireland follows the US trends.